MINISTER of State Aviation, Sen. Hadi Sirika has said that the Federal Government will aggressively pursue a fly Nigeria Act as part of plans to make Nigerian airlines including the new national carrier, Nigeria Air viable and competitive.
This is just as the Minister clarified who the owners of the 95% equity for Nigeria Air are, stating that the ownership of the carrier is in no way shrouded in secrecy.
Sirika indicated that the Ministry will liaise, lobby and interact with the legislative arm of government to ensure passage of the Act aimed at curbing capital flight and protecting domestic airlines.
He said, “As part of efforts to make airlines viable in Nigeria, the ministry is making moves to have the National Assembly pass a fly Nigeria act.”
“This act will require that anybody travelling on a ticket bought with public funds must travel on a Nigerian carrier unless the route is not served by a Nigerian carrier. However, with your private funds you can do as you like. Many countries including America has such as Act.”
Addressing some of the misconceptions making rounds on Social Media and other official quarters, Sirika said at start-up, government will own majority equity in Nigeria Air Limited Joint Venture Company.
After one year of operations, he explained, government will through an Initial Public Offer (IPO) divest her equity for purchase by Nigerians subject to approval of the Securities and Exchange Commission.
He said that the remaining 95% equity will be owned by a strategic partner and Nigerian investors with the Nigerian investors owning majority shares explaining that this will enable the carrier access its Bi-lateral Air Services Agreements ( BASA) and other benefits.
“At start-up government will own majority equity in Nigeria Air Limited Joint Venture Company. A Joint Venture Company that would be very similar to Nigeria LNG Limited. Nigeria LNG Limited is a huge JV success that is private sector managed so will Nigeria Air Limited. After one year of operations, government will through an IPO divest her equity for purchase by Nigerians subject to approval of the Securities and Exchange Commission. Government will then retain only 5% equity. ”
“The rest of 95% equity of Nigeria Air Limited will then be owned by the strategic equity investor and the general public. Majority ownership must however remain with Nigerians so that the national carrier can benefit from BASA and other bilateral agreements which require local beneficial ownership as a condition precedent. Management of the national carrier will be concessioned to the strategic equity investor with no step in rights and management control by government. Signed up acceptance and approval of the management concession agreement will be a condition precedent for the IPO.”
On why it’s seems the 5% equity holder funding the business, Sirika said government isn’t funding the entire project but bringing start-up capital.
He said,”The Government is not funding the entire project. It’s just providing startup capital in the form of an Upfront Grant/Viability Gap Funding. Once the strategic equity investor is in place, they will be expected to build on the initial investment made.
The OBC made it clear that the strategic equity investors will not start the national carrier; government has to start it in order to attract credible investors.”
On a lighter note, Sirika talked about the domain name that created the most buzz at the weekend stating that those Nigerians that planned to hawk domain names should ‘eat’ their names.
He said,”Further to the incorporation of the company with nominal directors the domain name www.flynigeriaair.ng has been reserved and will be made active very soon as part of the project evolution and marketing process. Some people whose only desire is to steal Nigeria’s common wealth by hawking domain names will not a get a kobo from the people of Nigeria. They can eat their domain names.”
He finally called for constructive criticism as the hallmark of democracy stating that spreading falsehood does the nation and people no good service.